A Solid Start To A New Life

Transcription

1 A Solid Start To A New Life Q Results Review April 21 st, 2011

2 Q1 11 highlights Trading profit more than doubled with all Sectors contributing to the improvement Revenues ( /bn) Net result ( /mn) Double-digit increase across all sectors 19.3% Positive swing of 148mn driven by operating performance Q1 10 Q1 11 (34) Q1 10 Q1 11 Trading profit ( /mn) Increase of 155mn driven by higher volumes across the board and particularly strong performance by CNH x Q1 10 Q1 11 Dec-end 10 Mar-end 11 Net industrial debt ( /bn) Up marginally driven by a seasonal increase in working capital and slight increase in capital expenditures Trading margin Substantially up y-o-y (+2.5 p.p.) 5.2% % p.p. Q1 10 Q1 11 Dec-end 10 Mar-end 11 Liquidity ( /bn) Down slightly; in addition, available undrawn committed facility of 1.5bn Net financial debt outstanding with Fiat at December 31, 2010 ( 2.8bn) fully reimbursed Note: Q1 10 figures are provided herein on a pro-forma basis to reflect a carve-out of Fiat Industrial operations from the historical Fiat Group financial statements Q1 11 Results Review April 21,

3 Q1 11 highlights (cont d) Indebtedness to Fiat SpA fully repaid Successful capital market transaction of 2.2bn CNH acquired at March-end full ownership of L&T Case Equipment Private Limited (non-consolidated JV established in 1999) to manufacture and sell construction & building equipment in India Pithampur facility currently builds backhoe loaders and compactors, employs ~600 people with a distribution network of 56 dealers and 144 outlets FY 2011 targets are confirmed 3

4 Q Revenues and trading profit by business Revenues ( mn) CNH 3,019 2, x x (533) 5, x Revenues up 17% (+16% in US$ terms) to 3bn: AG sales up 18% with favourable trading conditions in NA, Europe, EAME & CIS and APAC markets; CE sales up 20% benefited from growth in LA and Asia, and an improvement in NA largely attributable to replacement of ageing fleets Trading profit up 86mn to 213mn on higher volumes, increased industrial utilization, improved product pricing and better AG product mix +1.17x CNH IVECO FPT Industrial Eliminations & Others Trading profit ( mn) Q1 11 Iveco Top-line up 25% to 2.1bn reflecting continued recovery in most major markets except Italy Trading profit at 71mn with margin at 3.3% (up 3.1 p.p.) reflecting substantially improved operating leverage on the back of higher volumes n.a x (10) +1.7x CNH IVECO FPT Industrial Eliminations & Others x Q1 11 FPT Industrial Revenues up 50% to 0.7bn on strong volume increases, with demand higher from captive and external customers Positive trading performance swing of 13mn to 3mn, on higher volumes 4

5 Group purchasing Dec 09=100 FY 11 Average Q1 11 Average No impact in Q1 from supplier base No production stoppage in Q1, due to inventory on hand Q1 10 Average FY 10 Average No material impact foreseen for Iveco and FPT Industrial CNH: None of our business partners or tier I suppliers have suffered irreparable damage Dec '09 Q1 '10 Q2 '10 Q3 '10 Dec '10 Q1 '11 Q1 performance in line with start of the year expectations Higher than previously expected raw materials costs (main impact starting from April onward) will negatively affect FY performance Component parts supply disruptions expected to necessitate production curtailment, primarily in CE, in Q2 and Q3 Potential negative impact on FY 11 revenues between $ mn and trading profit between $40-60mn Expects to recover the additional costs through pricing 5

6 From trading profit to net result ( mn) Q1 Q Trading profit Unusual items, net (1) - +1 Operating income Financial charges, net (108) (111) (3) Investment income, net Pre-tax result Taxes (52) (78) (26) Net result (34) Financial charges, net : Substantially stable as higher net industrial debt levels were partially offset by lower cost of carry and lower hedging costs 6

7 Cash flow ( mn) Q1 '10 Q1 '11 Net Industrial (Debt)/Cash beginning of period (1,315) (1,900) Net Income (34) 114 D&A (excl. Vehicle Buybacks) Change in Funds & Others (40) (31) Cash Flow from Op. Activities bef. Chg. in W.C Change in Working Capital 66 (141) Cash Flow from Operating Activities Tangible & Intangible Capex (excl. Vehicle Buybacks) (119) (159) Cash Flow from Operating Activities net of Capex 35 (53) Change in Investments, Scope & Other 52 (74) Net Industrial Cash Flow 87 (127) Capital Increase / Share Repurchases / Dividends (*) 400 (7) FX Translation Effect 10 (49) Change in Net Industrial Debt 497 (183) Positive cash flow from operating activities offset by seasonal inventory build at CNH and Iveco Capex substantially in line with D&A Fiat Industrial rating Moody s: Ba1 (stable) S&P s: BB+ (negative) Debt-capital market debut, dual-tranche bond of 2.2bn 1bn, 5.25% coupon (March 2015) 1.2bn, 6.25% coupon (March 2018) Net Industrial (Debt)/Cash end of period (818) (2,083) (*) In 2010 includes dividends, capital increases and scope between Fiat and Fiat Industrial groups not related to the demerger 7

8 1 2 CNH Iveco 3 FPT Industrial 4 Outlook Financial calendar

9 1 2 CNH Agricultural Equipment Sales volume & industry outlook Q1 11 Global AG industry up 10% Tractors Combines FY 10 Q1 11 FY 11E Industry (change vs. prior year) Industry (change vs. prior year) CNH (performance relative to mkt) Industry (change vs. prior year) WW 14% 10% 0-5% NA 3% 5% 5-10% <40hp 4% 6% 5-10% 40+hp 2% 3% 5-10% EAME & CIS 6% 35% 15-20% LA 32% 1% (5-10%) APAC 18% 7% (0-5%) WW 1% 25% 15-20% NA 9% 37% ~15% EAME & CIS (17%) 40% 25-30% LA 29% (2%) (0-5%) APAC (8%) 6% ~20% WW AG 14% 10% 0-5% Tractors demand up 10%: recovery underway in EAME & CIS from low 2010 base Combines demand up 25%: strong equipment demand from cash crop segments due to sustained strength in commodity prices CNH tractor market share in line with overall market growth as a result of a positive performance in Europe CNH combine market share was down, with exception of APAC; recovery expected in the remaining part of the year as a result of equipment availability, which only became available in the distribution network at the very end of the quarter Company and dealer inventories increased in Q1 to satisfy retail unit deliveries and to accommodate transition stocks for new product launches in higher horsepower segment, but remained in line with or below industry averages FY 11 expectations Global AG demand flat to up 5% vs Tractors demand flat to up 5% Combines demand up 15-20% From Jan 1 st onward region split has been changed as follows: NA: USA, Canada and Mexico; EAME & CIS: 27 EU Countries, CIS, Balkans, African continent, Middle East; LA: Central and South America, and Caribbean Islands; APAC: Continental Asia and Oceania 9

10 1 2 CNH Construction Equipment Sales volume & industry outlook Q1 11 Overall CE industry increased 48% Light Heavy FY 10 Q1 11 FY 11E Industry (change vs. prior year) Industry (change vs. prior year) CNH (performance relative to mkt) Industry (change vs. prior year) WW 39% 44% ~25% NA 21% 47% 25-30% EAME & CIS 34% 48% 20-25% LA 88% 46% ~25% APAC 52% 40% 25-30% WW 61% 51% 25-30% NA 16% 49% 20-25% EAME & CIS 49% 63% 25-30% LA 96% 33% ~25% APAC 69% 50% ~30% WW CE 50% 48% ~25% NA up primarily due to fleet restocking LA: market was up 39% driven by strong demand from projects in both public and private sectors APAC: markets rose 47% with continued strong demand in heavy equipment segment in China CNH Light market share down due to low inventory levels as a result of transitioning to new products; expected to be resolved over the remaining part of the year CNH Heavy market share was stable with increased production units in excavator and wheel loader segments due to improved market demand FY 11 expectations (*) Light equipment demand up ~25% Heavy equipment demand up 25-30% (*) Not adjusted for Japanese supply constrains From Jan 1 st onward region split has been changed as follows: NA: USA, Canada and Mexico; EAME & CIS: 27 EU Countries, CIS, Balkans, African continent, Middle East; LA: Central and South America, and Caribbean Islands; APAC: Continental Asia and Oceania 10

11 1 2 CNH Agricultural Equipment New products & developments Bulk Fill System for Planters Bulk fill improvements in productivity and reliability New mini hoppers Improved air flow Accommodates new seed treatment varieties 3016 Pick Up Header Available in 12 and 15 versions Wider belts for reduced seed loss New Utility Tractor NH T4 PowerStar New Tier 3 engine for European and NAR markets (hp ) New cab: larger with improved visibility and more ergonomic control layout Fully integrated loader specifically designed Improved belt tracking and ground following Shipping throughout NA NH CX5000/CX6000 Combines 3020 Flex Auger Patented Terra-Flex cutter bar flex system Closer following of ground contour Shipping throughout NA Tier4 SCR technology engine for the European market (farms up to 600 hectares) Equipped with harvesting monitoring system, which can be operated from the improved cab now also including color touchscreen monitor Faster crop-to-crop flexibility: changeover time reduced from 4 hours to 20 minutes Tier 4A/Stage IIIB engine Available for high & medium hp tractors in NA and EU markets Tier 4A/Stage IIIB engine High hp 2WD and 4WD Tractors and Conventional Combine Class 5 and higher for NA and EU markets 11

12 1 2 CNH Agricultural Equipment Technological Advances Productivity / Performance Tier 4A/Stage IIIB SCR technology with >100hp machines Up to 14% more power * Double Clutch Technology optimizes transmission Advanced Farming System (AFS) guidance Economy / Fuel Efficiency Longer engine service intervals * 10% fuel savings with SCR * Simplicity / Easy Operation User-designed Multi-controls armrest Up to 50% less noise in the cab than competition Biodiesel Tier 3 engines approved for use with 100% Biodiesel fuel EcoBlue SCR Tier 4A/Stage IIIB engines approved for use with 20% Biodiesel blend Biomass Opportunities for self-propelled forage harvester and big baler applications EcoBlue SCR Tier 4A/Stage IIIB engines The industry's widest range of Tier 4A/Stage IIIB compliant products: 20 tractor and 9 combine models Tractors fuel efficiency up to 10% * Tier 4 SCR only solution for high hp products Energy independent farm & NH 2 Hydrogen tractor prototype * vs. CIH or NH Tier 3 EGR comparable models 12

13 1 2 CNH Construction Equipment New products & developments New Crawler Excavator for Case & New Holland/Kobelco Improved horsepower and fuel efficiency New monitor, controls, rear view camera & plug in GPS telematics Improved safety with Roll-Over & Falling Object Protection systems Reduced sound levels New Wheel Loader for Case & New Holland New axles & cab upgrade Improved hydraulic system & lifting capacity New monitor with Automatic Shutdown System New Skid Steer Loader & Compact Track Loader Launch in all regions Redesigned cab with better visibility Easier and faster to service, 13% improvement in serviceability Switchable electro-hydraulic controls Available with Radial or Vertical lift mechanism for better digging or load handling operations Tier 4A/Stage IIIB engine Crawler Excavator and Wheel Loader available for NA and European markets 13

14 2 Iveco (Trucks) Industry outlook Iveco order intake up 30% vs. last year LA up 40%; Europe up 30% ; RoW up 9% Industry ( 3.5T) * (change vs. prior year) Q1 11 FY 11E WE +26% % LA +28% +5-10% Iveco Order intake 1 [k/units] +30% Q1 11 WE overall industry up ~26% with progressive market recovery continuing but still below average Light : +16%; Medium: +14%; Heavy: +53% LA up +28% driven by Brazil (+31%) and Argentina (+57%) partially offset by Venezuela (-19%) Light (+24%); Medium (+33%); Heavy (+22%) FY 11 expectations WE improvement to continue with mixed performance among markets & segments Growth continuing for rest of the year in LA, but at slower pace European company and dealer inventory levels for new & used vehicles maintained at low levels Down 6% vs. Q1 10 Up 6% vs. Q4 10 due to seasonality * From Jan 1 st onwards information concerning EE industry figures are no longer available 1 Including all segments 14

15 2 Iveco (Trucks) Market share by region Light (3.5-6T) Medium Heavy Light ( T) Medium (8.0-31T) Heavy (>31T) WE market share Q % % 7.4% Brazil market share Q % 2 4.4% % 2 Change vs. Q p.p p.p. -2.3p.p. Change vs. Q p.p. +2.0p.p. +3.2p.p. WE market share 3.5T at 12.2% (7.8% 2.8T), down 2.0 p.p. Heavy segment performance affected by unfavorable market mix and aggressive competition in Italy Share gain in Medium due to strong product image and leadership Brazil market share 3.5T at 9.8% up 2.4p.p. vs. last year All segments up in a growing market Highly competitive products for both Medium (Vertis) & Heavy (Stralis NR and Cursor) driving market share increases Light driven by strong product performance position in key markets Light segment market share decreasing due to unfavorable product mix Vertis s introduction in medium vehicle segment (20% of Brazilian truck market) upgrading Iveco to a full-liner player First product imported from Iveco JV in China and integrated with advanced European technologies Launched in Q4 10 now available in market T at 6.7% (-1.1 p.p. vs. last year) 2 Brazil: Light 3.5-6T at 26.8% (-2.0p.p.); Medium T at 2.8% (+1.1p.p.); Heavy 16T at 9.2% (+2.7p.p.) Equipped with new common-rail NEF4 engine, produced by FPT Industrial in Sete Lagoas (ready to meet requirements of Euro V regulations) 15

16 2 Iveco (Trucks) China Light Segment Market share at 15.1% up 3 p.p. vs. Q1 10 Industry CV market still growing (+7%) but at a slower pace compared with robust growth across all segments last year Light (Daily segment) up 22% Medium (Yuejin segment) up 6% Heavy (SIH segment) up 9% Iveco non consolidated sales up 23% vs. last year Light +52%; Medium +6%; Heavy +41% Turbo Daily range (domestic market) Medium Segment Market share at 4.6% stable vs. Q1 10 Ouka (domestic market & export) Power Daily range (domestic market & export) Positive investment income for both JVs, recognized under equity method Classic range (domestic market) 1 ton range launched in Q4 10 (domestic market) Non consolidated sales [k/units] Heavy Segment Market share at 4.2% up 0.9 p.p. vs. Q Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 T / Dakang / T8 range (domestic market & export) Genlyon High End & Comfort (domestic market & export) 16

17 3 FPT Industrial Revenues up 50% to 729mn on strong volume increase Engines up 48% to 130k units driven by Cursor and F1 engines Gearboxes up 21% to ~18k units & axles up 25% to ~42k units Sales to third parties (including Fiat JVs) at 34% of total sales up ~ 80mn from last year Positive trading performance swing of 13mn to 3mn profit on strong volume increase Margin at 0.4% (negative 2.1% last year) Capacity utilization up 45% vs. last year Product and business development: F1C engine compliance with EPA10 and CARB regulation for HD and MDV applications in USA Start of production of Cursor 13 TST (presented in Q4 10) for Case IH Steiger and New Holland Series T9, featuring 660 hp max output, twin-stage turbo common rail engine and FPT Industrial proprietary SCR-only technology Contract extension with Generac and Komatsu supporting non-captive sales growth Completed ramp up in China of Cursor 9 for local market and CNH AG equipment products (Case IH Magnum and New Holland Series T8) F1C engine 3 Liters 16v DHOC Two stage turbocharger High performance EGR 17

18 4 Outlook The 2011 targets are confirmed Revenues of ~ 22bn Trading profit between 1.2 and 1.4bn Net profit at around 0.6bn Net industrial debt between 1.8 and 2.0bn Capex of around 1.4bn Capital expenditure programs are expected to increase substantially over the abnormally low levels of 2010 with a return to normalized levels of capital commitment across sectors 18

19 financial calendar July 25 Q2 & H1 Results May June July August September October November December October 27 Q3 Results 19

20 Appendix

21 2010 Revenues & trading profit by quarter FIAT Industrial mn Q1 '10 Q2 '10 Q3 '10 Q4 10 FY '10 Revenues 4,474 5,678 5,240 5,950 21,342 Trading Profit ,092 21

22 Q1 11 Revenues & trading profit ( mn) Q1 11 Change 2011/2010 Cons. Industrial Financial Cons. Industrial Financial Revenues Fiat Industrial 5,338 5, of which CNH 3,019 2, Iveco 2,123 2, FPT Industrial Others & Elim. (533) (527) - (253) (249) - CNH ($) 4,130 3, Trading result Fiat Industrial of which CNH Iveco (8) FPT Industrial Others & Elim. (10) (10) - (12) (12) - CNH ($)

23 Net debt breakdown ( bn) Dec. 31, 10 Mar. 31, 11 Cons. Ind. Fin. Cons. Ind. Fin Gross Debt* Including: (Net Rec.) / Pay. vs. Fiat Derivatives M-to-M, Net (3.7) (2.5) (1.2) Cash & Mktable Securities (3.5) (2.5) (1.0) Net Debt * Net of intersegment receivables 23

24 Gross debt ( bn) Outstanding Dec. 31, 10 Outstanding Mar. 31, Cash Maturities Bank Debt Capital Market * Other Debt Securitization and Sale of Receivables (on book) ABS / Securitization Warehouse Facilities Sale of Receivables Adjust. for Hedge Accounting on Fin. Payables Fin. Payables vs. Continuing Operations Gross Debt Cash & Mktable Securities 3.5 (0.1) Derivatives Fair Value (0.1) 12.2 Net Debt Available Committed Lines 1.5 * Excluding Bond fair value, including interest accruals 24

25 Debt maturity schedule ( bn) Outstanding Mar. 31, 11 Next 12 M 9 M Beyond 3.5 Bank Debt Capital Market * Other Debt Total Cash Maturities Cash & Mktable Securities 0.6 of which ABS related & Restricted Cash 1.5 Available Committed Lines 1.2 Sale of Receivables (IFRS de-recognition compliant) 0.5 of which receivables sold to financial services JVs (Iveco Finance Holding Ltd) * Excluding Bond fair value, including interest accruals 25

26 Financial charges breakdown Q1 11 vs. Q1 10 Average Outstanding ( bn) Rate/Spread (%) Net Charges ( mn) Chg Net Industrial Debt Q1 11 (2.2) 6.8% (38) Net Industrial Debt Q1 10 (1.1) 7.0% (20) (18) Cost of Carry Q1 11 (2.5) 3.5% (22) Cost of Carry Q1 10 (*) (2.7) 4.1% (28) 6 IAS 19 (interest cost on pension & OPEB) (18) (17) 1 Others (fees, FX, interest cost on long-term provisions, discount of certain receivables...) (42) (34) 8 NET FINANCIAL CHARGES (108) (111) (3) (*) Includes cash deposited with Fiat Treasury vehicles 26

27 Agricultural and Construction Equipment Revenues & trading profit Revenues ( mn) Revenues up 17% (+16% in US$) NA +17% EAME & CIS +26% 3,019 2,575 Q1 10 Q1 11 Trading Profit ( mn) Q1 10 Q1 11 LA -1% APAC +40% AG net sales up 18% (+17% in US$) on solid trading conditions in every region (strong increase in EAME & CIS markets but still below demand levels) except for LA Global tractor and combine unit deliveries increased 12% CE net sales up 20% (+19% in US$) on significant market increases in LA and APAC markets and improvement in NA market largely as a result of ageing fleet replacements Wholesale deliveries grew 3% Light equipment unit deliveries down 4% Heavy equipment unit deliveries up 19% Trading margin at 7.1% AG margin improved on higher volumes and better mix CE margin improved on better pricing, higher volumes & mix 27

28 Agricultural and Construction Equipment Trading profit variance & margin ( mn) % (10) Q1 10 Volume/Mix Pricing, Net Production Cost (18) (9) % SG&A R&D Other Q1 11 Higher volumes and increased industrial utilization, particularly in Europe, in both AG & CE and improved product mix for AG Improved pricing, in particular for CE Increased industrial activity, construction inefficiencies and products launch costs Investment in product portfolio 28

29 Trucks and Commercial Vehicles Revenues & trading profit Revenues ( mn) Revenues up 25.3% to 2.1bn 2,123 1,694 Q1 10 Q1 11 Trading Profit ( mn) 71 3 Overall volumes up 27.8% to 34.4k units By geography WE +22% to 21k units: Italy -9%, Germany +18%, France +39%, Spain +55% & UK +93% EE +67% LA 40% By segment Light +28% Medium +40% Heavy +34% Improved profitability driven by continued recovery of sales volume Trading margin at 3.3% up 3.1 p.p. vs. last year Q1 10 Q

30 Trucks and Commercial Vehicles Trading profit variance & margin ( mn) (4) 7 (2) 4 71 Volumes up 34k units on continued sales recovery of Trucks & Commercial (33) Vehicles 3.3% Focus on profitability through price recovery SG&A increased in absolute 3 0.2% Q1 10 Volume /Mix Price Purchasing Prod. Cost R&D SG&A Other Q1 11 value but reduced as a percentage of sales 30

31 Safe harbor statement Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. The Company's businesses include its capital goods business, including trucks, commercial vehicles, agricultural equipment, heavy and light construction equipment, powertrains for the capital goods and marine business, related service parts and financial services and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting these businesses. Forward-looking statements with regard to the Group's businesses involve a number of important factors that are subject to change, including: the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods -related products; factors affecting the agricultural business including commodities prices, weather, floods, earthquakes or other natural disasters, and governmental farm programs; general economic conditions in each of the Group's markets; changes in governmental policies regarding banking, monetary and fiscal policies, legislation, particularly that relating capital goods-related issues, agriculture, the environment, trade and commerce and infrastructure development; actions of competitors in the various industries in which the Group competes; production difficulties, including capacity and supply constraints and excess inventory levels; labor relations; interest rates and currency exchange rates; political and civil unrest; and other risks and uncertainties. Any forward-looking statements contained in this document are referred to the current date and, therefore, any of the assumptions underlying this document or any of the circumstances or data mentioned in this document may change. Fiat Industrial S.p.A. expressly disclaims and does not assume any liability in connection with any inaccuracies in any of these forward-looking statements or in connection with any use by any third party of such forward-looking statements. This document does not represent investment advice or a recommendation for the purchase or sale of financial products and/or of any kind of financial services. Finally, this document does not represent an investment solicitation in Italy, pursuant to Section 1, letter (t) of Legislative Decree no. 58 of February 24, 1998, or in any other country or state. 31

32 Contacts Fiat Industrial Investor Relations Manfred Markevitch website: 32